Top Office Buildings Filling Up Faster

In a time of low rents, nice office space in cities is in higher demand.

Top buildings in downtowns across the U.S. saw a total 1.6% of total inventory fill up in 2011, compared with the slower 1% seen in all buildings, according to a report by brokerage Jones Lang LaSalle. The top buildings—defined as about a third of office buildings in central business districts—had a vacancy rate of 14.7% at the end of 2011, lower than a 17.6% vacancy for all buildings.

Expect more of this. There hasn’t been much office space built, and there’s little in the pipeline—only 6.1 million square feet of top space in downtowns, according to Jones Lang LaSalle. That eases the pain for existing landlords, giving tenants fewer options from which to choose.

“Large blocks of space will continue to come at a premium across most geographies and tenant leverage will continue to slip with almost no new supply to speak of,” the report says.

For top buildings—termed “skyline” buildings by the brokerage—Portland, Ore. and Bellevue, Wash. have the lowest vacancy, at 8% and 9%, respectively. Bringing up the rear: Stamford, Conn. and Miami, Fla., with 25% and 26% vacancy.